Exclusive: Fears Mount Over High Street Tax Cuts
The Government announced a business rates discount scheme for small sized high street properties in England which have a Rateable Value below £51,000 at the 2018 Autumn Budget.
Under the scheme, ratepayers are set to receive a one third discount from their bill in 2019/20 and 2020/21 subject to State aid rules which Philip Hammond said would help “up to 90% of all independent shops, pubs, restaurants and cafes.”
But over 1,000 retail premises in the City of York eligible for the discount have received their new tax demands without the discount being applied only to be told that the Council was awaiting for software to allow them to calculate and apply the discount.
The news comes despite a spokesman at The Ministry of Housing, Communities and Local Government saying “Local Authorities have been working with their software providers and should ensure that their systems have been updated and the new discount can be applied at the start of the 2019/20 billing cycle without the need for rebilling.”
Richmond Council say that just 400 business premises have so far applied for the new relief out of 1,250 that they have identified as being eligible.
Whilst Invest In Bath say that less than half of the 800 retailers eligible for the one third discount have so far applied despite demands being sent out last week.
But the Council in Leicester say that they are helping 932 small retail premises adding “the majority of eligible businesses will automatically receive the discount without having to apply for it, although businesses with multiple properties will need to apply to ensure the discount doesn’t exceed European state aid limits.”
Robert Hayton, Head of U.K. business rates at real estate adviser Altus Group says “history seems to be repeating itself” referring to the fiasco in 2017 when the Government had to step in and name and shame those Councils failing to pass on £300 million in discretionary relief to help those businesses adversely affected by the revaluation adding:
“Councils should apply the discount automatically to those premises not part of a chain and unlikely to be impacted by State aid rules whilst bills could have been manually adjusted to avoid the uncertainty and subsequent cost of rebilling.”
The standard tax rate, which applies to all medium and large premises in England with a rateable value over £51,000, and precluded from the new discount, will rise by 2.4% to 50.4p in England on 1st April. It will be the first time the tax rate for business rates in England will have gone above 50% and will add an extra £127.88 million to the rates burden in inflation for the retail sector according to Altus Group.